Articles Tagged withunsuitable investment

The investment lawyers at Gana LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Luigi Mancusi (Mancusi).

According to BrokerCheck records, Mancusi allegedly “exercised discretion in effecting 45 transactions in a customer’s accounts without prior written authorization from the customer to exercise discretion in these accounts and without the accounts having been approved for discretionary trading by his member firm.” Further, Mancusi allegedly executed three transactions in another customer’s account without prior authorization. Reportedly, “Mancusi sold the security and used the proceeds to purchase two other securities in the customer’s account to replace it. As a result, the customer incurred fees, commissions, and ultimately a loss in disposing of an unwanted purchase into a new position, totaling $2,966.97.” Mancusi has been suspended from the securities industry for two months and has been fined $10,000.

Mancusi has also received five customer complaints.

In November 2017, a customer alleged Mancusi placed the customer in unsuitable investments for their age and risk tolerance and they were placed in unauthorized investments. This dispute is currently pending.

In July 2015, a customer alleged unauthorized transactions took place in the customer’s accounts. This dispute settled for $60,000.

In July 2013, multiple customers alleged unsuitability, breach of fiduciary duty, negligent misrepresentation and failure to supervise. This dispute settled for $50,000.
In October 2009, a customer alleged Mancusi misrepresented material facts related to an unsuitable investment as well as unauthorized investments. This dispute settled for $80,000.

In September 2002, a customer alleged she instructed to Mancusi to purchase a fixed annuity and she was sold a variable annuity after Mancusi did not follow her instructions. This dispute settled for $30,000.

According to BrokerCheck records kept by the Financial Industry Regulatory Authority (FINRA), broker Clifford Vatter (Vatter) has received six customer complaints. Furthermore, Vatter was terminated in July 2017 from Raymond James & Associates for allegedly engaging in unauthorized trading in one customer’s account.

In September 2016, a customer alleged Vatter made unsuitable investment recommendations, misrepresented and omitted material facts and breached his fiduciary duty. This dispute settled for $250,000.

In April 2009, a customer alleged Vatter made unauthorized withdrawals among other allegations. This dispute settled for $13,300.

In April 2001, a customer alleged Vatter misrepresented material facts and made unsuitable recommendations. This dispute settled for $250,000.

According to BrokerCheck records, Elaine LaCerte (LaCerte), also known as Elaine Diones and Elaine Diones Helzer, was suspended by the Financial Industry Regulatory Authority (FINRA) in August 2017.

LaCerte was suspended for allegedly engaging in an unsuitable pattern of short-term trading of Unite Investment Trusts (UITs) in over 100 customer accounts. Without admitting or denying the findings, LaCerte consented to the sanctions and the entry of findings. The findings stated that “in connection with these accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.” LaCerte has been banned from the industry for six months and was ordered to pay a $5,000 fine.

Moreover, LaCerte has been subject to four customer disputes.

In November 2016, a customer alleged LaCerte misrepresented material facts with respect to the purchase of a municipal bond. This dispute settled for $25,000.

In August 2016, a customer alleged LaCerta recommended unsuitable investments. This dispute settled for $24,464.76.

In July 2016, a customer alleged LaCerta misrepresented material facts with respect to investment risks. This dispute settled for $4,000.

Gana LLP is investigating a customer complaint filed with the Financial Industry Regulatory Authority (FINRA) again broker Joeann Mitchell Walker (Walker). According to FINRA’s BrokerCheck records for Walker, there are several settled disclosures on her record. Walker entered the securities industry in 1992 and currently employed at Next Financial Group, Inc. She was previously employed at LPL Financial LLC (8/2006 – 4/2015), Commonwealth Financial Network (7/1998 – 8/2006), American Express Financial Advisors (6/1992 – 7/1998), and IDS Life Insurance Company (06/1992 – 7/1998).

In March 2016, a customer complaint was filed alleging Walker made unauthorized sales of different stocks, unauthorized and unsuitable purchases of variable annuities, and unauthorized mutual fund switches during the period of June 2014 to June 2015 while Walker was employed at LPL Financial LLC. The stated alleged damages were $208,764.00. The claim was settled in November 2016 for the amount of $175,000.00.

Walker has two additional previous disclosures from 2005 and 1999. In April 2005, a claim was filed alleging that Walker practiced in excessive turnovers in the client’s mutual fund account. The claim alleged damages of $30,000.00. This claim was settled in July 2005 for the final settlement amount of $9,900.00.

The investment and securities fraud attorneys of Gana LLP are investigating potential recovery options for investors with broker Glenn Charles Wiggle Jr (Wiggle). According to BrokerCheck records Charles Wiggle has been subject to four customer complaints among other claims. The customer complaints allege unsuitable investments, and misrepresentation among other claims.

The most recent customer claim was filed in September 2015 alleging that in 2007, Wiggle recommended unsuitable investments in speculative securities such as Behringer Harvard Strategic Opportunity Funds and US Energy Platinum Energy Partners causing $500,000.00 in damages. The claim settled for $109,000.00. In addition, a customer filed a claim in April 2011 alleging that from December 2007 to October 2010, the broker made unsuitableinvestments in REIT purchases and purchased equities without prior consent, causing $100,000.00 in damages. This claim settled for $55,000.00.

Our firm has represented many clients who invested in REITs, the Behringer Harvard Strategic Opportunity Funds and US Energy Platinum Energy Partners. All of these investments come with high costs and historically have under-performed, even safe benchmarks like U.S. treasury bonds. For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products (if they can be redeemed). However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investors often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

The investment attorneys with Gana LLP continue to report on investor related losses in oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. Our firm represents securities investors in claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks.

Among the MLPs that have suffered significant declines is NuStar Energy L.P. (NYSE:NS). NuStar Energy has plummeted in value by 54% in value over the last year. According to the company’s website, NuStar Energy has an enterprise value of around $6 billion and based in San Antonio, TX. NuStar has approximately 8,700 miles of pipeline and 79 terminal and storage facilities that store and distribute crude oil and other refined products. NuStar Energy has operations in the United States, Canada, Mexico, the Netherlands, the Caribbean, and the United Kingdom.

As a background, about 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. In the past year, investors have lost $20 billion in publicly traded in master limited partnerships, publicly traded oil funds. This amounts to an astonishing $8 of every $10 they had invested, according to a report prepared for The Associated Press article. The research does not include losses from $37 billion of bonds sold by the partnerships in the five years since 2010 or losses from private placement partnerships. However, banks like Citigroup, Barclays, and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors.

Our clients tell us similar stories that their advisors hyped MLPs as high yielding investments without significant discussion of risk. In a recent Associated Press article, common stories of how investors are pitched by their financial advisors on oil and gas private placements were reported on. Often times these products are pitched as ways to ride the boom in U.S. oil and gas production and receive steady streams of income.